Wealthy changing tack from wealth preservation to growth

Ultra-high net worth individuals shifted their focus from wealth preservation to wealth growth in 2013, according to new research, as the wealth of the world’s high net worth population grew 14% to $52.6 trillion.

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18 June, 2014 04:20 PM

Ultra-high net worth individuals shifted their focus from wealth preservation to wealth growth in 2013, according to new research, as the wealth of the world’s high net worth population grew 14% to $52.6 trillion.

The annual Capgemini/RBC World Wealth Report, which surveyed more than 4,500 individuals, found the world’s high net worth (HNW) population now sits at almost 14 million, up 15% on the previous year.

When it came to ultra-high net worth (UNHW) individuals, 31% were focused on growth in 2013, an increase of 13 percentage points from last year’s findings.

By comparison, only 28% are now focused on wealth preservation, down 17 percentage points on the previous year.

George King, head of portfolio strategy at RBC, said this was an indication of economic recovery and he expected high net worth (HNW) individuals, who have investable assets of $1 million plus compared to UHNW individuals’ $30 million plus, would shortly follow suit and shift their financial goals also.

“In the past we’ve seen ultra-high net worth individuals leading the pack because they’re able to take more risks,” King said. “Now that the market conditions are improving, it is not surprising that we are seeing more ultra-high net worth individuals focusing on targeted investment opportunities.”

The report also found 92% of respondents believed creating a positive social impact was important, with 60% saying it was “very” or “extremely” important. In emerging markets this was even stronger, at 91% in India, and 89% in both China and Indonesia.

Socially responsible investing was the top way HNW individuals sought to make a social impact, followed by ongoing giving to charities, community involvement, volunteering and making business decisions with a defined social impact objective.

The report highlighted that wealth and population growth among UHNW individuals exceeded all other wealth bands, with the exception of Latin America.

Global UHNW growth was led by North America and Asia-Pacific, with the Asia Pacific HNW population due to overtake North America by 2014.